Last week, Tony Marolda submitted an Op Ed suggesting that Harvard would be better off if the state income tax was repealed. He argues that Harvard pays more in income tax than it receives in state aid, and that we could easily make up the difference with increased property taxes. The trouble with this argument is that it ignores the impact increased property taxes will have on our neighbors in Harvard and communities across the commonwealth.
In 2005, aggregate income in Harvard was $386,124,000 spread among approximately 1,800 real estate property taxpayers. This means we would collectively save approximately $20 million in income tax—so far so good. But, we would likely lose $4.1 million in state aid. Remember, under education reform, there is a Supreme Judicial Court order mandating state subsidization of low-income communities to ensure adequate school funding. If there is any state education funding left, it will be directed to these communities, not us.
What Tony ignores is that we will not be exempt from inflation, energy cost increases, and mandated special education spending. But to be conservative, let’s assume we can hold the budget increase to 3.5 percent next year or $700,000 (i.e., a 1.0 percent override to keep close to the current service level). Let’s also assume that we will pass an override to replace the missing $4.1 million in state aid to the town (for schools, roads etc.). This is an assumption Tony makes that is highly uncertain given its substantial size—we would need to raise the average family tax bill by $2,666 per home to make up the $4.8 million. The real issue, however, which Tony fails to point out, is that families with taxable incomes of less than $50,000 will save less than $2,666 on their income tax bill. Those earning at the highest levels get the greatest benefit—a family with $250,000 in income saves five times the amount of the $2,666 property tax increase. Do we want to live in this kind of community?
This proposal will disproportionately punish seniors and less fortunate residents in cities and towns across the commonwealth. Tony suggests that we can exempt them, but, in fact, state law expressly prohibits that, and only allows towns to offer them loans against their home equity. None of us likes taxes, but at least an income tax taxes us in accordance with our means. This proposal will tear at the fabric of our community as longtime residents are no longer able to afford to live in their homes—not to mention the financial condition of the commonwealth and its other local communities. I encourage everyone to vote against this proposition in November.
Bruce Leicher
Warren Avenue
